Right after I e-filed a week ago, I realized that I had answered this question incorrectly: "At any time during 2021, did you receive, sell, exchange or otherwise dispose of any financial interest in any virtual currency?"
I answered YES whereas my answer should have been NO. I've purchased cryptocurrency in 2021 (on Coinbase), but that was it - I did not have any taxable transactions; i.e. selling, exchanging or disposing of cryptocurrency.
Since I answered the question incorrectly, do I need to amend my return? Or can I just forget about it?
No, you don't need to amend your income tax return. If you answered "yes" in error in the interview screen, TurboTax would have just sent you to the cryptocurrency section but since you did not enter any transactions, your tax return amounts are correct.
Please read the TurboTax FAQ: Do I need to amend?
No, you don't need to amend your income tax return. If you answered "yes" in error in the interview screen, TurboTax would have just sent you to the cryptocurrency section but since you did not enter any transactions, your tax return amounts are correct.
Please read the TurboTax FAQ: Do I need to amend?
Since you mentioned Coinbase, did you happen to earn anything on Coinbase Earn?
The reason I ask is that I earned free crypto from participating in Coinbase Earn, but like you, I didn't sell, exchange, or dispose of any cryptocurrency. I was just wondering whether the answer to the cryptocurrency question on the 1040 would still be NO with the free crypto I got from Coinbase Earn (as well as crypto earned from other company promotions).
You should answer Yes to the Cryptocurrency question. In this case, you did receive currency. This may have been an Airdrop or earned by Staking. In either case, it is reportable income.
You can post this transaction in TurboTax.
1. Federal
2. Wages & Income
3. Less Common Income
4. next to Miscellaneous Income, 1099-A, 1099-C
5. Select Other Reportable Income
6. Answer Yes on Any Other Taxable Income?
7. Continue through the interview
This will become the basis of the currency for future transactions.